Total System Services Inc. Reports Operating Results (10-Q)
Total System Services Inc. has a market cap of $3 billion; its shares were traded at around $15.23 with a P/E ratio of 13.5 and P/S ratio of 1.9. The dividend yield of Total System Services Inc. stocks is 1.8%. Total System Services Inc. had an annual average earning growth of 12.1% over the past 10 years. GuruFocus rated Total System Services Inc. the business predictability rank of 3-star.TSS is in the portfolios of Donald Yacktman of Yacktman Asset Management Co., Chuck Royce of Royce& Associates, Jeremy Grantham of GMO LLC.
Highlight of Business Operations: Total revenues increased $6.4 million, or 1.6%, during the three months ended March 31, 2010 compared to the same period in 2009. The increase in revenues for the three months ended March 31, 2010 includes an increase of $5.8 million related to the effects of currency translation of foreign-based subsidiaries and branches. The Company has included reimbursements received for out-of-pocket expenses as revenues and expenses. The largest reimbursable expense item for which TSYS is reimbursed by clients is postage. The Companys reimbursable items are impacted with changes in postal rates and changes in the volumes of all mailing activities by its clients. Reimbursable items for the first three months of 2010 were $70.8 million, an increase of $7.3 million or 11.5%, compared to $63.5 million for the same period last year. The increase in reimbursable items was the result of increased in Visa access fees. Excluding reimbursable items, revenues decreased $895,000, or 0.3%, during the three months ended March 31, 2010 compared to the same period in 2009.
For the first three months of 2010, the Companys cost of services were $292.2 million, an increase of 2.6%, compared to $284.7 million for the same period last year. During the first three months of 2010, TSYS announced plans to reduce its workforce through attrition and job elimination. As part of the workforce reduction, the Company incurred approximately $2.6 million in severance payments.
For the first three months of 2010, the Companys selling, general and administrative expenses were $44.1 million, a decrease of $2.1 million, compared to $46.1 million for the same period last year. The decrease was the result of lower expenses associated with share-based compensation.
Interest income for the three months ended March 31, 2010 was $191,000, a decrease of $578,000, compared to $769,000 for the same period in 2009. The decrease in interest income is primarily attributable to the decline in interest rates.
Interest expense for the three months ended March 31, 2010 was $929,000, a decrease of $181,000 compared to $1.1 million for the same period in 2009. The decrease in interest expense in 2009 compared to 2008 relates to the decline in interest rates.
For the three months ended March 31, 2010 and 2009, the Company recorded a translation gain of approximately $247,000 and a translation loss of $884,000, respectively, related to intercompany loans and foreign-denominated balance sheet accounts.
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